2014 (12) TMI 997 - CGOVT - Central Excise

Denial of rebate claim - duty was paid on exported goods from fraudulently availed cenvat credit - Held that - condition 2(a) of Notification No.19/04-CE(NT) dated 6.9.04 stipulates that all excisable goods shall be exported after payment of duty directly from factory. The said provisions stipulate that rebate shall be granted of duty paid on excisable goods exported. In this case, payment of duty is in dispute and case for recovery of Cenvat credit & erroneously sanctioned rebate claims is pending adjudication before Commissioner (Adj.) New Delhi. Though there is no finding in the impugned order-in-appeal regarding any violation of condition/procedure as laid down in Notification No.19/04-CE (NT) yet the fact remains that duty paid nature of the exported goods is still in dispute. The fundamental condition for granting rebate is that duty paid nature of exported goods is established. The proceeding have been initiated vide the impugned show cause notice dated 23.02.2010 for recovery of wrongly availed cenvat credit as well as erroneously sanctioned rebate claims and adjudication proceedings are pending before Commissioner of Central Excise. In view of this position, it is premature to decide the admissibility of rebate claim till the show cause notice dated 23.02.2010 pending adjudication before Commissioner of Central Excise (Adj), New Delhi is decided. The Government does not find force in argument of applicants that issue of demand of cenvat credit and rebate claims are two separate proceedings as the status of payment of duty will be decided in the said ongoing adjudication proceedings. As such, case is required to be remanded for denovo consideration in the light of outcome of adjudication proceedings in show cause notice dated 23.02.2010. - Matter remanded back - Decided in favour of assesse.

Summary

Issues:
1. Rebate claims under Rule 18 of the Central Excise Rules, 2002.
2. Power of remand by Commissioner (A).
3. Payment of duty on exported goods from Cenvat credit.
4. Admissibility of Cenvat credit and rebate claims.
5. Governing statutory provisions of grant of rebate.

Analysis:
1. The revision applications were filed by M/s. Shiv Shakti Enterprises challenging the orders-in-appeal regarding rebate claims under Rule 18 of the Central Excise Rules, 2002. The applicants had exported goods and filed rebate claims, which were initially sanctioned by the adjudicating authority.

2. The department filed appeals against the rebate claims, leading to a remand by the Commissioner (A). The applicants contested the power of remand by the Commissioner (A), leading to revision applications before the Joint Secretary. The Joint Secretary remanded the case back to the original authority for a decision on merits.

3. The dispute arose regarding the payment of duty on exported goods from Cenvat credit. The applicants argued that duty was paid in accordance with Rule 8 of the Excise Rules, thus deeming it paid for the purpose of rebate claims. However, the department alleged irregular Cenvat credit utilization, leading to recovery actions.

4. The Government observed that the duty payment from Cenvat credit was in dispute, pending adjudication. The admissibility of rebate claims was intertwined with the resolution of the Cenvat credit issue. The Government decided to set aside the impugned orders and directed the original authority to decide based on the outcome of the ongoing adjudication proceedings.

5. The governing statutory provisions of grant of rebate under Rule 18 of the Central Excise Rules, 2002 were crucial in determining the admissibility of rebate claims. The condition for granting rebate required the establishment of the duty paid nature of exported goods, which was in dispute due to the Cenvat credit utilization issue.

This detailed analysis highlights the complexities surrounding the rebate claims, power of remand, payment of duty from Cenvat credit, and the interplay between Cenvat credit admissibility and rebate claims as per the statutory provisions.